December 7, 2006

55 comments:

Honestly, I can't muster up a whole lot of sympathy for this fellow Jake. On the one hand, this developer, "Slinde," may be trying to give as little as he possibly can, under the law. On the other hand, it's a coerced transaction -- there's no way he'd be selling them the unit at a price that far below market if the city weren't forcing him to do so. What's more, if it's a new law, he probably didn't purchase the land and develop the complex factoring in the possibility that he would be having to give away 15% of the units at artificially depressed prices; this probably throws a wrench into his (and his partners') recoupment schedule.

Lastly, he's undeniably right to be suspicious about the possibility people will game the system to get into low-cost housing, when they don't, or shouldn't, really qualify. They will. The upper middle class do that all the time, after all, for financial aid at universities. And that means that resources specially set aside for poor people who really need it actually get eaten up by the upper middle class, defeating the point of programs like this.

That's what I thought. The units start at $286,000, the family got a unit plus amenities for $190,000 and felt entitled to complain because the $100,000+ forced discount wasn't good enough. If you're the one who's actually losing the $100,000, it seems like you've got a right to kick and scream a little, and to wonder about the social benefit of selling "affordable" condos to people that, in the final reckoning, can afford $200,000.

Rhetorically, I could ask what the city of Madison expected. But of course, what they expected is that the developers would be good little socialists just like they were. But if they were good little socialists, they wouldn't be developers, they would be on the city council or working for the city or the University.

I loved the last little bit, where it appears that the developer managed to accidently make himself probably over $100k by not being able to sell the third unit durint the prescribed time period.

This is a good lesson for all the liberal do-gooders out there who think that they can design laws that can really do what they want. Rather, if there is a loophole in the law, no matter how accidental, it will be exploited in short order. Invariably, the people trying to get around a law vastly outnumber those making it, and in the aggregate, if not individually, are a lot smarter too.

Of course Slinde is trying to give as little as possible under the law. Why is anyone outside Madison surprised at that? Companies like Slinde are not in business to save the world or provide low cost housing, etc. They are in business to make money. Each house that they didn't sell under this program could be sold for $100k or more on the open market.

Housing welfare in Madison for people who can afford to pay $200,000 for a house? And they dump the cost of this welfare off on developers? I'm entirely on the side of Slinde.

Except I'm sure that Slinde is able to sell his condos for such huge profits because Madison is such an attractive place to live because of all the amenities. Like an excellent public school system, proximity to the world class, publicly funded, university, extensive, publicly funded and supported arts community, and an extensive and well-maintained infrastructure.

Yet when asked to contribute to the community by making a fraction of his outrageously overpriced housing affordable for the nurses, teachers, and police that make living in Madison so attractive, all he does is whine.

We can probably assume that Slinde pays his taxes to support such a fabulous infrastructure. The same taxes paid by all the other people who especially benefit from the infrastructure (shopkeepers, employees, etc.) And we can probably also assume that the act of developing creates jobs for people and also that his developments bring more money into the areas he develops. We may even be able to determine that if his $100,000 hadn't been stolen, he could invest it in more projects, leading to more jobs, more development, and more long term growth revenue growth for the city--doing much more for the community than forcing him to give a $100,000 discount to one family who could have lived elsewhere.

So what's the further reasoning? He's making good money, so let's really stick it to him?

I went into this article with a bias toward the buyers and against the developer. By the end of the article, I felt the buyers were a bunch of selfish bastards gaming the system and whining about it. Wanna bet most of them flip their units within a very few years for a massive profit?

Alas, Chapel Hill is getting ready to go down this route. One other thing that seems to be a myth - that these folks will walk to work, walk to shop, etc. In my observation, they always end up driving to their jobs in the Research Triangle Park and then driving to the mega-malls. No one shops downtown because the only goods being sold downtown are CDs, overpriced clothes, and student-level dining.

Yet when asked to contribute to the community by making a fraction of his outrageously overpriced housing affordable for the nurses, teachers, and police that make living in Madison so attractive, all he does is whine.

I suspect his (normal) clients are actually the ones funding the things you're describing as "publicly funded" there -- that money doesn't just arise ex nihilo. Mostly, it comes from the state taking rich peoples' money through property and income taxes.

The other thing, of course, is that his housing isn't "overpriced" if there are people willing to pay for it (as, evidently, there are). That's that whole supply and demand thing. As long as there is some housing for them, I don't think we can say it's really "overpriced."

On the other hand, I regularly describe my own apartment as overpriced, but I'm still willing to shell out money for it every month, so I suppose I have no right to complain.

Re: Bruce Hayden:

Of course Slinde is trying to give as little as possible under the law. Why is anyone outside Madison surprised at that?

It's not surprising. But customers understandably resent being given the hairy eyeball, when they're asserting their rights under the law. Whether the law is silly or sensible is beside the point. It's still a legitimate gripe.

If the city were competent at building housing, it should do so, and quit this back-door type of subsidized housing. But, of course, we have all seen what happens when the public sector tries to build and manage housing - much of it has been torn down in the last decade or so afteer it nearly collapsed and became uninhabitable through vandalism and crime.

So, instead, Madison tried to use developers to build the low-income property, and to hit the other buyers and the builder with the cost. But of course, the builders are not socialists like those mandating this, so they are trying to maximize profits. It is, of course, those ill-gotten profits that allow the builders to continue building and hiring all those people. Nevertheless, it is rather silly to expect builders to have acted any different than they did here.

The same taxes paid by all the other people who especially benefit from the infrastructure (shopkeepers, employees, etc.) And we can probably also assume that the act of developing creates jobs for people and also that his developments bring more money into the areas he develops.

The problems of gentrification and affordable housing in this country is complex and has been a problem since zoning was invented in this country (and after all it was invented to protect rich people from having to live too close to poor people and industrial areas, not for some socialistic ideal). To say that developers should be allowed to build whatever they like and people who don't like or can't afford the results should move somewhere else is a recipe for disaster and is what has caused many of the problems with urban sprawl and poor urban planning we currently have in this country. That is the problem with you Libertarians, you have no sense of community or clue that you live in a society. But I bet if someone cut your sewer line you would be the first to complain.

The other thing, of course, is that his housing isn't "overpriced" if there are people willing to pay for it (as, evidently, there are). That's that whole supply and demand thing. As long as there is some housing for them, I don't think we can say it's really "overpriced."

Well, you may believe in the free market and that something is not overpriced just because there is a willing buyer for it, but you apparently have never heard of a speculative bubble or the "greater fool" theory. And anyone following the housing market in the past few years knows that it (and especially the condo market) has all the hallmarks of just such a market.

For all of you who think that these purchasers are going to flip their "cheap" condos. I bet they'll be lucky to get what they paid for them a couple years from now. I feel sorry for the suckers who are paying "full market price" for them.

"Yet when asked to contribute to the community by making a fraction of his outrageously overpriced housing affordable for the nurses, teachers, and police that make living in Madison so attractive, all he does is whine."

Asked, or forced to as a price of doing business in Madison?

Outrageously overpriced housing?

Why don't you start building reasonably priced housing for the rest of us then, and tell us how that works out?

"affordable for the nurses, teachers, and police that make living in Madison so attractive"?

Do you think the developer is a subordinate division of Madison's local government, whose primary mission is to provide below market rate housing to Madison's nurses, teachers, police and others?

Do you really believe only the developer absorbs these cost? Or have you considered the fact these costs are shifted to market-rate buyers? Have you considered the fact that all the local officials of Madison did, in their deep and compelling compassion for Madison's working poor, was to cynically shift the cost of their housing to market-rate buyers?

Are you remotely familiar with the notion of private property, and what that means?

Do you think private companies really have no reason whatsoever to be angry with politicians and bureaucrats imposing expensive mandates upon them as a condition of doing business?

Do you really think there is no practicable limit to the power of government to impose limits upon private economic activity, and that that is a good thing?

Do you think people have an absolute right to live wherever they want to, at public expense if they cannot afford housing?

"That is the problem with you Libertarians, you have no sense of community or clue that you live in a society."

That's what I love about the left: Not only are you utterly clueless about economics, but you cannot avoid calling people names. I used to know a lot of leftie fools in Madison, which is one reason why I long ago decided to never consider living in the Peoples Republic.

It's not surprising. But customers understandably resent being given the hairy eyeball, when they're asserting their rights under the law. Whether the law is silly or sensible is beside the point. It's still a legitimate gripe.

I agree that the customers are more justified in their gripes. But, as you noted earlier in your post, you think your residence is overpriced, as do many. That doesn't keep you from living there, etc. The two low-income buyers were trying to get something for nothing, or realistically, a lot less than it was worth. So, I don't have as much empathy as I might there.

But it is everyone else who is so offended by the developer's actions and attitudes that I am really aiming my scorn at, esp. the city and the paper.

To say that developers should be allowed to build whatever they like and people who don't like or can't afford the results should move somewhere else is a recipe for disaster and is what has caused many of the problems with urban sprawl and poor urban planning we currently have in this country.

I don't think we can blame developers for our awful cities -- after all, it wasn't developers who created our awful cities. I don't think it was even zoning alone -- it was visionaries like Robert Moses trying to remake the city up from scratch in some utopian, harmonious ideal. You have to be creative to screw things up that badly.

And there's other things, of course -- "White flight" left the cities the distressed ghettos and wrecks they became midcentury, because, frankly, middle-class White people didn't want to have to live next to poor Black people. And, for that matter, rich people generally didn't like living next to poor people, no matter what their race, so they moved into their own little enclaves of hyper-expensive properties.

You can force people to live together, I suppose, with this kind of regulation, or public housing, or whatever, but if people don't want to put up with it, they'll leave, and the city will be worse off than it was before. A wreck like modern Detroit. And it's awfully hard to recover from that.

So, in a sense, you may be right -- our cities were ruined by people who didn't like the results of developments, planning, regulations, etc. moving away, out into the exurbs and suburbs. But I'm not sure the conclusions we should draw from that are quite the same as the conclusions you seem to be drawing.

Well, you may believe in the free market and that something is not overpriced just because there is a willing buyer for it, but you apparently have never heard of a speculative bubble or the "greater fool" theory.

Oh sure. I wouldn't describe these things as "overpriced," though -- they're priced according to what people are willing to pay, and that's their market value at the present. Some elements of the calculations that underpin peoples' willingness to pay may be supported by incorrect assumptions about future trends in the market. Not necessarily even about the ability to flip the condo later -- it could also be incorrect assumptions about trends in the crime rate (e.g. that it will go down), or about future business developments in the area (e.g. a big employers doesn't come into the area after all), and so on. This is the uncertainty in pricing at any given moment, though -- I don't think it's the case that there's a "true" price consistent across time, that we should expect to see reflected in the market pricing. The value we place on a commodity, expressed through pricing, will change as the situation changes. That too is the market.

And anyone following the housing market in the past few years knows that it (and especially the condo market) has all the hallmarks of just such a market.

I think this is true. Which is why I've been holding off on purchasing a condo myself. But my assumption that prices will fall in the future may prove just as unfounded as other peoples' assumption that prices will continue to rise -- who knows? That said, I don't think we're exactly in Tulip territory here.

Do you really think there is no practicable limit to the power of government to impose limits upon private economic activity, and that that is a good thing?

I don't know why you are asking all these questions in response to statements I never made.

So I'll ask you some.

Do you think have the right to do anything you want with your property?

Does the government have any right to set development limits on private land?

Do you even think the government should own property or should it all be privately owned?

Should public services, like sewer, water, fire, schools all be privatized?

Do you think the people who service the people who live in desirable locations should be able to live within a reasonable commute from work. If not, where are they supposed to live? Maybe we could just set up workhouses for them and lock them up at night.

And there's other things, of course -- "White flight" left the cities the distressed ghettos and wrecks they became midcentury, because, frankly, middle-class White people didn't want to have to live next to poor Black people.

I really think you need to look into how white flight was encouraged by suburban developers through conscious tactics like "blockbusting". That was an all too common tactic of selling one house to a black family and then having a real estate agent going door to door with brochures from a suburban development saying to the neighbors, "Did you see who just moved in down the street? You better sell before the neighborhood goes downhill and your house is worth nothing. Just look at these beautiful houses with big yards they are building out in the suburbs. None of those people out there." It was calculated.

Amen, Freder!! It's always the Libertarians who are whining about having to pay taxes to support an entire society, and yet aren't ashamed to drive on roads or use a sewer system. Buncha selfish hypocrites. I hope our taxes go UP alot, just to piss you off.

I really think you need to look into how white flight was encouraged by suburban developers through conscious tactics like "blockbusting". That was an all too common tactic of selling one house to a black family and then having a real estate agent going door to door with brochures from a suburban development saying to the neighbors, "Did you see who just moved in down the street? You better sell before the neighborhood goes downhill and your house is worth nothing. Just look at these beautiful houses with big yards they are building out in the suburbs. None of those people out there." It was calculated.

Er, so? Maybe other people suggested it to them, but it was their choice -- not like they were forced to leave. It's also not like the developers or whoever were wrong about plummeting property values -- property values did, in fact, plummet as the middle class left for beautiful houses and big yards in the suburbs (now accessible by car), and poorer people came in. Perhaps it was a self-fulfilling prophecy, but again -- so? It was also correct.

That was an all too common tactic of selling one house to a black family

Who, what, would never have chosen to live there otherwise? What are they supposed to do -- prevent Black people from moving in? That's illegal! They may have manipulated the developments in the market (desegregation) to their advantage, but I have difficulty seeing these developments as their fault.

"Do you think have the right to do anything you want with your property?"

Anything I want? No, but I certainly have a significantly greater right to do anything with my property than does the government have the right to limit my use, normatively speaking.

"Does the government have any right to set development limits on private land?"

Yes, of course, we've long ago agreed to that, but its right is not limitless to the extent of de-facto ownership.

"Do you even think the government should own property or should it all be privately owned?"

This is a mindless question, but I'll play along. Of course government should be able to own property, but only to the extent necessary to provide necessary services, not unduly influence the private economy.

"Should public services, like sewer, water, fire, schools all be privatized?"

No, of course not, except where private businesses can provide better services than public ones, such as schools.

"Do you think the people who service the people who live in desirable locations should be able to live within a reasonable commute from work. If not, where are they supposed to live? Maybe we could just set up workhouses for them and lock them up at night."

This may be news to you, but historically Americans have lived in a free society, free to own the fruits of their labors (save for slavery, but we addressed that already at a cost of over 600,000 killed) and to live where they wish. No one has a right to live where they wish IF THEY CANNOT AFFORD IT. They can live, like I do, where they can afford to do so. Governments, like businesses, have to compete for labor; that labor has a price; they will have to pay that price for labor; those providing the labor should, responsibly, account for their living situations as well. That is life as a responsible adult. Living at someone else's expense, and expecting to be able do so is immature and selfish. Politicians and political ideologies catering to such impulses deserve nothing by scorn and disrepute.

As for workhouses and locking people up at night, I think that is much closer to your agenda, as it has no role whatsoever in my world (save for maybe the homeless, for whom such a program might actually benefit all of us, esp. the homeless).

Who, what, would never have chosen to live there otherwise? What are they supposed to do -- prevent Black people from moving in? That's illegal!

Actually at the time it wasn't, but that is beside the point. But if you have no problem with developers manipulating racism, fear of crime and exploiting people in the name of making money, and in the process destroying our once great cities, then more power to you.

Do you really believe only the developer absorbs these cost? Or have you considered the fact these costs are shifted to market-rate buyers?

Waah, the true costs of residential development are rarely, if ever borne by the developer, especially in an inflated market. Developers, even in those municipalities that assess impact fees, never pay the actual costs their developments have on the additional infrastructure in the form of extra schoolrooms, sewer hookups, police and fire protection, traffic congestion. All these costs are borne by the municipality and the taxpayers, not the developer, who builds his houses, takes his profits and leaves. So spare me the economic analysis of how he is getting screwed. Show me his cost per square foot to build the condos, how much he is selling them for, and compare that to profits on similar construction in Fond du Lac. Then we'll see how unfair this really is.

I didn't answer your questions because they were shrill and silly and didn't deserve a response (and btw, neither did mine). Although your wacky answer that private education is always superior to public education was very telling (and made without any rational connection to facts)

From the article: "'This was a dream,' says Maleah. 'This was like winning the lottery. It's just too bad that it was so emotionally draining.'"

There's a kind of gratitude in there, I suppose. Nevertheless, it astonishes me that there are people who will give their name and address and complain to a news reporter that their charity came unaccompanied by a sufficient show of respect.

I was only seven years old but I can still recall vividly my mother's shame as she paid for groceries with food stamps. Maybe if she'd been handing over a housing voucher for $100,000 she'd have held her head high and had the courage to gripe about the dented soup can.

I've probably moved, oh, about 13 or 14 times in my life, including in and out of rentals AND purchased homes. Never once did it occur to me to expect some sort of "inherent" fun to be involved.

including a dishwasher

It seems to me that including a cabinet is reasonable rather than leaving a gaping hole. On the other hand, it's not such a big deal to put in shelves or rolling cart for storage in that space. (I have something exactly like that in my own kitchen, and that's not the first time I've used that trick.)

If the real complaint is not having a dishwasher included, well--boo hoo.

My experience is neither special nor unique: I didn't live in a place with a dishwasher until I was in my mid-30s (my parents have me beat--they were in their 60s, and retired). My parents didn't get a dryer until I was a senior in high school. Except for an occasional brief stint, here or there, I didn't live in a home with a washer or dryer, either, also until my mid '30s. When we moved here, we didn't have a washer or dryer for two more years.

Life goes on.

Lord, I wonder how these people would have coped with a teeny, '50s era stove with an open pilot-lot hole on the range top and an oven that required manual lighting. (I whipped up some fine meals on that thing between 1986 and 1993!)

But if you have no problem with developers manipulating racism, fear of crime and exploiting people in the name of making money, and in the process destroying our once great cities, then more power to you.

The question is -- would things have turned out differently if they'd just shut up? I don't think these tensions were things that you could just paper over by getting people to pretend they didn't exist. As far as exploiting racism -- my view is that they're not heavily culpable. Appeals to racism are dirty, but people make them all the time -- today, too, even in this context, particularly among people opposing gentrification, implicitly on the grounds that it brings White yuppies buying houses in traditionally Black neighbourhoods (at least, this is the complaint I hear most frequently; sometimes it's about White homosexuals specifically, rather than just Whites in general). Reprehensible, perhaps, but that's the way people are -- it's not activists or developers creating these attitudes ex nihilo. They're working with what they've got, i.e. us.

They respond to a need, and, in responding to a need, they reap a reward. The fault lies in the society that has racist needs, as our then-legally (and now-voluntarily) segregated society has and had. I mean, today, if a real estate agent came up to you and said: "Look, there's a Black Man living two doors down from you! Flee!" how far would that get him? Not far, I imagine, because you're (presumeably) more or less post-racist, and have no particular feelings one way or the other about living two doors down from a man just because he happens to be Black.

To blame the developer for these developments is, as I see it, to deny the reality of the expressed desire of Whites to avoid living near Blacks, and of rich people to avoid living near anyone else.

"your wacky answer that private education is always superior to public education was very telling (and made without any rational connection to facts)"

I never said "always superior”; regardless of your inability to read with full comprehension, private K-12 education, as any reasonably sentient observer of rational facts knows, is more often superior to public K-12 education than not, and most of us with good sense don't even debate the point.

As for wacky, well, that is a matter of opinion to which you're entitled, no matter how blinkered.

I have a bit more sympathy for this guy than I've read here. Basically, if there is a problem with this policy it's not his problem. He didn't create the policy or force the policy on the developer.

It sounds like this is little more than bureaucratic hassles being pushed on those who are only taking advantage of a great opportunity. The developer is throwing a tantrum in the way he can.

The buyer is taking advantage of a policy already in place. He didn't institute it or gain the right to a cheaper unit through the courts. The developer made an agreement to sell these units in this way, so questions about the rights of the developer to build only expensive units are moot.

If this is wrong or stupid then vote out the politicians who created this policy. However, that's the problem really. Madison is a certain sort of town that wants to keep certain sort of values and have a certain sort of population. Thus current residents vote in politicians who will help shape the city in that way, which includes these kinds of housing demands.

It may indeed be a coerced transaction, but the coercion is not by the buyer and the coercion was agreed to by the developer. The buyer should be able to take advantage of the policy with only reasonable effort.

Yet when asked to contribute to the community by making a fraction of his outrageously overpriced housing affordable for the nurses, teachers, and police that make living in Madison so attractive, all he does is whine

This is a classic 18 year old's view of economics, and the "classes." Rich people bad.

"Developers, even in those municipalities that assess impact fees, never pay the actual costs their developments have on the additional infrastructure in the form of extra schoolrooms, sewer hookups, police and fire protection, traffic congestion."

That's right. The people who move into the new developments and make use of those services pay for them through their property taxes.

Building a house doesn't put any additional strain on the local school system. Raising a family in that house does. A toilet in a condo doesn't require upgraded sewer systems unless someone is living there flushing it.

This is a classic 18 year old's view of economics, and the "classes." Rich people bad.

Not really. It's not about classes, or the struggle between rich or poor. It's about having people with varied professions living within the same general space. Teachers, and policeman, and nurses, as in the example, are people who likely could be doing something for a lot more money but chose different professions for whatever reason.

Madison is likely wanting to have people with more varied interests and focus, as well as being better able to attract people to these fields.

So, likely it is less "rich bad, poor good" and more "we don't want only bankers, lawyers (no offense) and business folks."

I don't see why the developer's so upset. It's a free market and he understood the conditions beforehand--and if he didn't understand them, well that's just his own fault. And he had a perfect right to go build houses somewhere else if he found the regulations too onerous.

Oh, and as for "well they're only paying what the market is willing to bear": horseshit. Speculators are getting into bidding wars and setting up non-sustainable interest-only loans in the blind belief that "real estate always goes up" and they'll be able to turn a fat profit five years from now. You can't claim that a real-estate market where most of the purchases are for investment is a realistic market.

I don't see why the developer's so upset. It's a free market and he understood the conditions beforehand--and if he didn't understand them, well that's just his own fault. And he had a perfect right to go build houses somewhere else if he found the regulations too onerous.

My sense from the article is that these regulations are new -- that they weren't in place when he and his partners bought the land, or when they started construction.

And the upshot of this discussion is that these regulations may well be too onerous, so he (and other developers) will know not to risk building additional housing capacity in Madison, and will take his business elsewhere.

I don't see the developer or the two families who bought as good or bad. Rather, both are doing what you would expect - maximizing their return/results.

Rather, what I see is a city trying to do social engineering and failing because, as usual, it's planners, etc. weren't as smart as the aggregate on the other side, in this case, the developers.

Of course the developer tried to minimize his sales of these units - he made $100k+ more for each unit he sold at market. The city naively included a provision that let the developer out if a unit didn't sell w/i a specified period of time, and so the developer dragged his feet on the sales of the units, and suceeded in delaying enough for one of the three units to not sell in time. If that isn't rational on the developer's side, I don't know what would be.

Of course, with the developer making $100k+ less per low-income unit than he would otherwise, he has no incentive to put in any appliances not specifically called for in his contract. Anyone who complains about that should be willing to put their money where their mouth is, and pay for them themselves.

My one fault would be that the developer left the gaping hole where the diswasher was supposed to be. That was going a bit too far for me. And, that is likely to have violated the sales agreement.

Madison is a certain sort of town that wants to keep certain sort of values and have a certain sort of population. Thus current residents vote in politicians who will help shape the city in that way, which includes these kinds of housing demands.

It's about having people with varied professions living within the same general space.

Hmmm. Now we are back to the point that I made in the thread about the schools busing children from one side of town to the other and denying children the ability to attend school in their own neighborhoods. All in the effort to create the "approved" balance of races.

My point was what next? Forcing approved mixes of races in neighborhoods and denying people the right to live where they want to because the "quota" of Chinese or East Indians was filled up?

Seems that Madison is right on schedule in their attempt at socialism and hare brained social engineering.

Liberals have not the slightest clue about economics or how the real world operates. Absolutely clueless about the real ramifications of their actions. If it feels good, do it. No matter what the ripple effect.

Developers, being the palm rubbing evil earth-rapers that they are, are interested in making money. The Nerve. Developers choose to build where restrictions are lower and profits are higher. After development slows down in "affordable housing" markets, the laws of supply and demand dictate that as more people compete to live in fewer dwellings, the costs rise.

I wonder what Freder Frederson lives in. I doubt it is a mud hut. The delicous irony of all of this is as "affordable housing" forces more and more people to live out of urban areas and commute in to work, CO2 output rises from all those extra miles driven. Here in southern California, most new development is taking place over 100 miles from the work centers of L.A. and San Diego. Got to love the law of unintended consequences.

Seems that Madison is right on schedule in their attempt at socialism and hare brained social engineering.

This isn't really "socialism," though. It's just a bit of urban planning. In the past, the mixed-income balance was achieved by the government building vast utopian housing projects that, inevitably, turned into unliveable hellholes and drove property values into the pits. There's various reasons this is probably not going to end quite that badly.

1) It's a condo, not a housing project. Ownership probably means the residents will take better care of it.

2) The price is knocked down a significant amount. But not that much -- there's some subsidised housing where, based on location and square footage and all that, you should be able to get rents of $2000/month or so for some units (if they were properly maintained and weren't full of drug addicts), but the unit goes for 3) It's not run by the government. It's run by corporations being coerced by the government. Unlike the government (or at least, government employees), the corporate owners, and their employees have an incentive to keep property values up, keep the area clean and upscale, and police resident behaviour. So it's highly unlikely to fall apart into a crime-ridden hellhole the way a government building would likely be.

4) The proportionate imposition on the developer is nontrivial. But at the same time, it's not huge. On the margin, it will probably persuade some developers that it's more trouble than it's worth to work on making appealing housing for Madison, leading to a tighter supply. But there's still a sufficient market of affluent buyers to support additional condo construction. Tighter supply may also mean that more affluent purchasers will end up having to pay more for the condos they do get, effectively subsidising lower-income access to comparable condos. But they'll still pay it. And tighter supply may not be much of a minus either, in the city's calculations -- lots of people don't like the idea of many new condo buildings going up, particularly if they're going up in or nearby normal houses.

5) The problem is worst for condos caught in the problem unexpectedly now. In the future, developers who choose to stay in the market despite the new regulations will take into account the regulations the city is imposing, and plan accordingly.

So overall, the effect is certainly not "socialism," and is, in fact, a comparatively mild sort of urban planning, much less tyrannical than the old sort, and preferable to, say, Kelo-style eminent domain. I still think it's wrongheaded, but it's not going to end in genocide or anything, the way socialism tends to.

The buyer has to go to subsized (by the seller) housing because there is no affordable housing in Madison?

I checked realtor.com for Madison. Keep in mind December is not the top month for moving real estate. There would probably be more homes listed in the summer. There are 385 2 bed/1 bath single-family homes for under $200K and 836 condos/townhouses meeting the same criteria.

I don't see the problem with the "gaping hole." Everyone is going to want a dishwasher. They'll have to buy one when they can, and they've got the space prepped. Either the dishwasher was in the contract or it wasn't, and if it wasn't, the next best thing is to be "dishwasher-ready."

This discord is the city's fault. The program invites abuse, and it doesn't help really poor people. It just creates a scarce and highly desirable benefit for a very few middle class people. It looks to me like a gesture by the city, a way to show off anti-development values.

I don't think the IZ people are allowed to sell the unit at market price. I assume it has to stay within the IZ regime. I don't know the details of the local law here.

john(lesser): Yes, I wish they'd just let the developers build up the downtown to the point where the supply was up and the price would level off. It would improve downtown to have more density and some impressive taller buildings. But people around here have deep psychological conflicts about such things. It's soooooo annoying.

People in Madison sometimes act as though they'd like things to be more urban, but they constantly make decisions that produce sprawl. They whine aboutt the sprawl too, but it's beyond the city limits.

I'm pretty sure that's wrong -- the IZ rules were in place before Monroe St. Commons was built. That's my recollection, at least.

You seem to be right -- the ordinance was effective (it looks like) February 15, 2004, and probably passed a while before. Monroe Commons seems to have gone through the approval process sometime in late 2004. Google tells me so; it must be true.

Incidentally, that schedule looks much faster than the construction I see going on where I am (Northern Virginia) -- a ways down the street from where I am, there's a new apartment building that seems to have been under construction for the past year or so. It's not even a particularly large building.